Volkswagen scandal. 2.0 Accuracy of Social Responsibility Claim

Volkswagen
Green-wash Detector Research Report

1.0          
Introduction

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Intensive competition across local
and international markets has forced firms to invest intensively into the
marketing of their goods and services. This is a proven way of creating a
competitive advantage as such promotions and advertising campaigns tend to
appeal and attract more customers. Besides, it differentiates firms from
rivals, while enabling them to conform to growing societal expectations on
environmental management and social responsiveness. Bazillier and Julien, (9)
note that with the introduction of the corporate social responsibility (CSR)
concept, firms have quickly adopted it in an attempt to increase their appeal
to customers who reward socially responsible firms. In return, firms have
ventured into green-washing practices in an attempt to lure customers to buy
and use their products. Bazillier and Julien, (10) define green-washing as a
practice of making a misleading or unsubstantiated claim about environmental
and social benefits of a service, product, company practices or  technology. As a result, the firm or industry
could appear environmental conscious, when in reality its activities have adverse
impacts on the environment. It is upon this basis that this green-wash detector
research report critically analyzes green-washing activities in the automobile
manufacture industry and in particular, the Volkswagen diesel-gate scandal.

 

2.0          
Accuracy of Social Responsibility Claim made by
Automobile Companies/ Industry

The automobile industry has
consistently been under pressure to conform to changes in environmental
regulation on fuel economy, and potentially, reduce the environmental impact of
cars (Amatulli, Michele, Matteo & Gianluigi, 139). These pressures emanate
both from the micro and macro environment. For instance, with the increasing
production of cars, it is prudent that manufacturers all over the world monitor
the amount of fuel consumption by reducing dependence on oil which is a
non-renewable source of energy but also high in carbon. There are also
stringent government regulations and other benefits such as lenient taxation
for auto firms those manufacturers’ efficient vehicles (Amatulli et al., 153).

Another factor is that because of the increased awareness of the need to
conserve the environment. Consumers are changing their behavior in favor of
environmental conscious automobile manufacturers. Through this struggle,
manufacturers are conducting research and development aimed at increasing fuel
efficiency of their cars.

 

For instance, Nissan, a Japanese
auto manufacturer introduced a new feature, known as Nissan Leaf which is
advertised as increasing the fuel efficiency of their Nissan brands. Nissan
created a complementary advert to market this new product. In the commercial,
it depicted a scene of melting polar ice caps. This led to the movement of
polar bears from their natural habitats towards the cities. As it approaches
the city, it is increasingly upset by the pollution arising from modes of
transport. The bear arrives in a suburban area where it finds a man about to
drive off in a Nissan Leaf and gives him a bear hug. From the face value, this
advertisement speaks volumes to potential consumers on the fuel efficiency and
environmental consciousness of the product. The commercial also highlights the
current focus on greening and reduction of global warming, which has become a
conventional practice among automobile manufacturers.

 

Customers watching these adverts
are often convinced and equally enticed into associating with products that
promise to preserve natural habitats of animals and safeguard the environment
for posterity. This is the reason why such adverts often attract high sales volume
for auto manufacturers. A critical analysis of this advert shows that Nissan
Leaf, just like most car brands purporting to be environmentally friendly has a
lot of shortcomings. For instance, Nissan Leaf is only convenient and practical
for short distance travels and around cities because of its limited battery
capacity which can support a charge for 100 miles or between 8 and 10 hours on
full charge. Another issue is that current infrastructure to support charging
of these cars is limited. This leads to the question on the contribution of a
Nissan Leaf to reducing global warming. The reality is that electricity used to
charge the car is derived from natural gas and coal which are contributors to
climate change.

 

The accurate part is that electric
and hybrid cars reduce amounts of carbon emissions but they do not completely
conform to the envisioned future narrated through the adverts. Another point of
contention is that automobile manufacturers use rubber, chemicals, natural
minerals and other raw materials that pollute the environment indirectly and
directly (Smit & Elizabeth, 49). This implies that manufacturing and using
any car contributes towards environmental pollution and degradation. The whole
transport industry has been blamed for its environmental impact and forced to
consider alternative approaches that create positive climate change. One of the
focus has been directed towards the production of cars that consume less fuel
and emit lesser CO2. As a part of conforming to these demands, and appear
culturally aware as well as environmentally conscious,

 

Ford Motors Company has found
itself in green-washing scandals following its advertisement of 2007 Ford
Escape Hybrid, 2015 Lincoln MKZ Hybrid (The Green Market Oracle, para 4). This
is associated with complete deceit and misleading of customers regarding the
environmental benefits of a car. BMW hybrid X6 also found itself in a
green-washing claim but was challenged at the Frankfurt Motor Show (Budinsky, 209).

Another case that forms takes the center stage for this research report is the
latest case of green-washing by Volkswagen.

 

3.0          
Systematic Research to Determine Extent of
Misrepresentation of Situation in VW Green-wash

According to Earth Day 2016 report,
Volkswagen took the first position for green-washing practices followed by
Rainforest Alliance, Natural American Spirit Cigarettes, AJM Packaging
Corporation, Lei Electronics carbon neutral batteries and SeaWorld killer whale
shows. This practice has been deeply rooted in the belief that consumers are
willing to pay more for firms that produce sustainable, environmentally
friendly, good for the community and good for the society cars. According to Smit
and Elizabeth, (50) there is nothing clean about using diesel and diesel engines.

These engines cause pollutions beyond legal limits. This is evident with the
multiple class-action lawsuits against most automotive manufacturers.

Mercedes-Benz was charged for its BlueTEC vehicles marketing campaign promoting
them as earth friendly and clean diesel. In reality, they released nitrogen
oxides 65 times higher than legal limits allowed by Environmental Protection Agency
(EPA).

 

This was followed by Volkswagens
admission that it had been involved in engineering deception after its engineers
installed a cheat device (Ewing, para 1; Lane, 33). This is an illegal software
that was installed in VW diesel engines to avoid being detected for high levels
of nitrogen oxide emission. The scandal ensued in September 2015. This was
after the firm had sold more than 11 million of this brand. It is believed that
VW began making plans to deceive its customers in 2006 as it wanted to enter
and increase its market shares in the USA against Toyota. However, its
engineers were unable to produce small engine cars that met American emission
standards. At a meeting in Wolfsburg, VW executives agreed to install a cheat
device on the engines (Siano, Agostino, Francesca & Sara, 27). It began
aggressive marketing in 2008 purporting to be a clean diesel engine. In 2013,
West Virginia University conducted laboratory tests which showed that road
tests of VW emitted more poisonous levels of nitrogen oxides than laboratory
tests. A follow up was made, and the information becomes public.

 

VW was forced to recall affected
cars in the USA. The public made an outcry on the case of green-washing which
led to the collapse of stock prices, revenue and net income. The CEO resigned
and the firm charged $14.7 billion for settlement. The firm acknowledged
charges for conspiring to violate a Clean Air Act and defraud the US government
(Ewing, para 4). The result is that VW failed to justify its commitment to
producing environmentally friendly products that are good for society and good
for the community. This research, as justified by the seriousness of the lawsuits
and impact on the company, points at a massive misrepresentation of the
situation.

 

4.0          
Conclusion

Secondary research on VW
diesel-gate scandal highlights a case of green-washing in the automobile
industry. The report also justifies other cases of green-washing where firms
such as Ford and Nissan are involved in varying degrees of greenwash. Whereas
Volkwagens represents the biggest form of deceit, Nissan Leaf’s advertisements
are misleading to a certain extent, but it is much better than the installation
of a cheat device to manipulate carbon emission test results. These cases
highlight the difficulty of achieving perfect ethical standards across most
industries thus bringing to question the concept of corporate social
responsibility and its contribution to green-washing.

 

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